Orange County Under Seige of Foreclosure

Posted in Foreclosure Homes, August 7th, 2008 |

Foreclosure have lain seize on Orange County, especially where sub-prime lending had concentrated, and was intensifying. During the second quarter of the year, four Santa Anna ZIP Codes were the epicenter of foreclosure in the county. The overall ratio between foreclosure and the total number of condominiums and houses more than doubled over that in the first quarter in some ZIPS, according to DataQuick, which analyses foreclosure trends in the country.
Statistics show that 75% of the people in Santa Ana had borrowed money to buy houses under sub-prime lending in 2005 when the real estate market was booming, and it was they that were the worst hit in the nationwide foreclosure crisis. Santa Ana, with 92701 properties filing a foreclosure was the forerunner and 23 out of every 1000 households received a foreclosure filing during the second quarter compared to 10 out of every 1000 ratio in the first quarter, as projected by DataQuick which detailed foreclosure in each ZIP for the quarter ending June 2008.
The tentacles of foreclosure had spread to the neighbouring county cities, including Anaheim, Orange, Garden Grove and Stanton and even beyond to places that have not been the target of sub-prime lenders. Market watchers stress that people enjoying good credit back-up had ventured to buy houses in areas such as parts of Lake Forest, Ladera Ranch, Rancho Santa Margarita and Aliso Viejo, as investments or to live in, in the near future. Unfortunately, these buyers are suffocated under their mortgage loans.
These South county ZIPs rank third for having the maximum concentration of foreclosure among counties. Experts blame foreclosure for pulling down the prices of houses in the country. In Santa Ana’s six ZIP codes the median prices of houses sold dropped 50% compared to a 13% drop in June last year.
US Representative, Loretta Sanchez, covering Santa Ana, Garden Grove, parts of Anaheim and Fullerton, promised that the housing bill passed at the Congress intended to help areas like central Orange County. The housing bill would enable borrowers entrapped in the foreclosure dilemma to interchange the existing loan mortgages for loans at more affordable rates and conditions. The borrowers in default would be backed by refinance mortgages by the Federal Housing Administration to the tune of $3oo billion. Apparently, though the bill looks good, it is obvious that lenders would be unwilling to suffer losses on loans backed by the FHA, snapping out the efficacy of the much-publicized housing bill.